On July 1, 20X1, Grams Construction, Inc., agreed to construct a factory for a customer. The contract called for payments to Grams totaling $2 million.

Grams has correctly determined that it is appropriate to recognize revenue over time, and it uses its costs as a measure of completion. The same cost information is used to determine the portion of the contract price Grams is entitled to receive. The following information describes the costs incurred and expected remaining costs at December 31, 20X1 and 20X2.

Required:

Determine the amount of revenue Grams reports related to the above factory in 20X1, 20X2, and 20X3.

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Dec. 31, 20X1 Dec. 31, 20X2 Dec. 31, 20X3 $ 40,000 85,000 Total cost incurred $115,000 $128,000 Estimated remaining costs 15,000 Estimated total costs $125,000 $130,000 $128,000